Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

The clock is ticking loudly for the Keith and District Hospital. I must inform you that if extra funding is not provided then the great community hospital at Keith will close in less than two months. Yes, members, it will close in April if we do not do something about it, the situation is so desperate.

Some history: 10 years ago the state government was funding Keith hospital for 35 per cent of its total costs. The other 65 per cent was funded by the Keith community, unlike other community hospitals, which are 100 per cent funded by the taxpayer. This figure over 10 years had already been whittled down to 25 per cent of the total costs provided by the state government and 75 per cent provided by the community. It was already unsustainable when the state government announced it would cut funding further by a whopping 60 per cent, meaning the state government was only going to fund the Keith hospital to about 10 per cent of its total costs compared to 100 per cent for other community hospitals. This will cause the hospital to close in a matter of weeks.

Here is the sorry state of what has to be the worst case of silo economics I have ever seen—silo economics because it looks only at the savings and not at the costs, and the costs will be five times greater than the savings.

This hospital has received over $1 million in capital infrastructure funding from both the Howard government and the Rudd government in recent years, firstly for aged-care infrastructure and then for a doctors surgery just recently opened through Rudd government funding. But these will be totally wasted because the aged-care facility of 18 beds will close and the doctors surgery will close because the patients will go elsewhere. The St John’s Ambulance volunteer service will close, and the state will be forced to put in a paid service 24 hours a day on one of the busiest and most accident-prone highways in Australia, and people will have to travel further distances.

This silo economics is so stupid. The minister, John Hill, has for the last two years refused to meet with the Keith hospital board to discuss these problems. They want to explain the financial ramifications of this decision. I repeat: the extra costs will be five times the supposed savings and both the federal government taxpayer and the state government taxpayer will pay them.

Regional hospitals are the backbone of the towns and districts that surround them. These hospitals provide important services to the community and many jobs for the residents. The importance of regional hospitals is often overlooked or taken for granted. There should be no prejudice. These hospitals are vitally important to the communities they service and are the lifeblood of the towns and districts.

In the South Australian state government budget last year, Labor announced that it would be cutting further funding to regional hospitals, including Keith and District Hospital, Ardrossan Community Hospital and Moonta Hospital. For these three hospitals there was a huge reduction in funding allocated. It was not a small cut but a huge blow, resulting in the hospitals having only so much time left before the doors would have to be shut for good. Unfortunately, Keith will be the first to do so. A massive 60 per cent of the funding allocated to Keith hospital from the state government was to be removed. There is no way the hospital could keep operating with nearly $400,000 of funding taken away by the state government. I might add that I do not blame the federal government for this, but they can save money for themselves and the state government and send the message that we will not tolerate this financial stupidity—and it will not cost the federal government a cent.

If the Keith hospital closes its doors in April, as it will, the next closest hospitals will be Bordertown Memorial Hospital, 50 kilometres away; Naracoorte Hospital, 100 kilometres away; and Murray Bridge Hospital, nearly 200 kilometres away. On top of forcing residents to attend already overbooked hospitals, this will leave a large stretch of notoriously dangerous highway without a hospital: 180 kilometres of the Dukes Highway and 240 kilometres of the Riddoch Highway. Between 2004 and 2009, 46 per cent of fatal crashes and 30 per cent of crashes causing serious injury in the south-east occurred on the Dukes, Riddoch and Princes highways. The helipad situated at Keith hospital is used for the transfer of critically ill patients, including road crash victims, directly to major hospitals. I had personal experience of this when my own son was flown by helicopter to Flinders hospital in Adelaide. This service will be lost once the hospital closes. The effect of a hospital closure on a community such as Keith will be on more than just jobs, services and patients. Hospitals provide the vital services that communities need and are built around.

Labor just does not seem to care about regional communities. It must not concern the state or federal government much at all if Keith hospital closes in April, because, despite lobbying from every direction, the governments have not taken any action on this issue. I was totally in awe to see the way the Keith community rallied one another to create a fight that made it all the way to Parliament House in Adelaide. One thing I have learnt growing up in the country is that news travels fast—the bush telegraph. The imminent closure of Keith hospital at the hands of the state government has caused a huge stir in this community, but more so in communities all around South Australia. I have received correspondence to my office from members of the community, from members on the hospital board and from people residing in other areas of South Australia that are concerned about the raw deal that Keith hospital is getting. In my role as a member of parliament I have lobbied both the state and federal governments for months now, with no action by either. I have attended community meetings and met with members of the hospital board. These are hardworking volunteers trying to save their hospitals, but it appears to be making no difference to the ignorant Labor governments. I have written to the state minister and the federal minister. I have had delegations to the federal ministers—in fact, two—but no action was taken.

With this motion, I am calling on the federal government to do what is right by the Keith, Moonta and Ardrossan communities. This motion calls on the government to directly fund Keith, Ardrossan and Moonta hospitals, and it will not cost the federal government a cent, because, as you read the motion, it means taking the money out of the state allocations and returning it directly to the hospitals. Both the state and federal governments must realise how important these hospitals are. The funding amount, in total, is a mere $1,046,000. This will save three hospitals. It is a very small amount to save three very important hospitals in the community. It will see Keith hospital funded with $600,000, and this will bring it back to its rightful figure. Ardrossan will receive $146,000 and Moonta $300,000. These funding amounts will enable these regional hospitals to continue providing their extremely valuable services to the communities they support: the GPs, the accident and emergency services, aged care, acute care and allied health professionals. All these services that the community benefits from will be able to continue with this funding. It will enable people travelling the highways between Mount Gambier and Adelaide, or coming from Victoria to Adelaide, to feel confident that there are services close by if they are needed—and I can tell you that they will be needed.

This motion calls on the federal government to reduce the state government’s national healthcare specific purpose payment by the amount that the three hospitals, if directly funded, will need. The state government must be condemned for cutting funding from regional hospitals. Labor must recognise the critical roles hospitals play. A public meeting is being held in Keith tomorrow night to further discuss the options available to the community. Talks held between the hospital board and the government have not reached any outcomes. This motion, if successful, will restore the funding needed so the important regional hospitals can continue. The state government does not seem to appreciate the importance of Keith, Ardrossan or Moonta hospitals. With this motion I hope to rectify this. No community should be pushed to the side and disadvantaged for no reason other than because the state government is city centric and ruthless.

I thank the member for Boothby and the member for Gray, who will further expand on this important issue. We must act and we must act now. (Time expired)

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Barker for raising this very substantial issue. The members for Barker, Gray and Boothby are extremely good members who are very caring in their electorates, and I would not expect anything less of them than to speak on a motion about regional hospital funding.

This is a substantial issue and it is such a good case for the government’s policy on national health funding. It is not all that often that we hear opposition members make statements in such close keeping with the stated policy of this federal Labor government. So I thank the member for his gesture, his demonstrated goodwill, cooperation and support for this federal Labor government’s approach to regional health funding.

As the member demonstrates through this motion, the propensity for one level of government to blame another level of government for health funding problems, insufficient resources and poor allocation of resources has been acute. It has been the one certainty in Australian politics over the last decade that one level of government will blame the other level of government for the state of our health system, problems with our system, and externalise responsibility for improving our system, whether it be in the regions or in the cities.

The member has penned a courageous motion in which he calls for federal government responsibility for direct funding of three private hospitals which happen to be regional. Direct funding from the Commonwealth to the regions is great, but the fact that they are private hospitals does complicate the issue somewhat.

The government’s health funding policy has further matured over recent weeks, as we have seen, and it is timely to remind the House where we are at at the moment. The government has long expressed the view and emphatically stated that we need to stop the blame game. We need to stop governments blaming each other—state governments blaming the federal government and federal governments blaming state governments—for sub-par health investments and outcomes. So we have advanced the concept of federal and state funding in accordance with a prescribed formula and being pooled and then targeted towards the need of local hospital networks, with health services on the ground run for the benefit of and in accordance with the needs of their region.

There has been debate as to how to fund this change and, in particular, how to fund the increase in funds required into the future to pay for a superior health system and health service across our nation. This has now been resolved. The Council of Australian Governments meeting on 13 February produced the heads of government agreement on national health reform. The communique in part read:

The parties agree to contribute funding for hospitals into a single national pool which will be administered by an independent national funding body, distinct from Commonwealth and State Departments, to be operational from 1 July 2012.

               …            …            …

The national funding pool would also pay directly to State governments, into discrete State managed funds:

a.         block funding amounts (including base and efficient growth funding) for services better funded in that way, including relevant services in regional and rural communities;

               …            …            …

The parties agree that payment arrangements from the national funding body will reinforce the States’ role as system managers, and will involve each State directing the disbursements from State accounts to LHNs in that State.

               …            …            …

The parties agree that the establishment of LHNs will give local communities and clinicians a greater say in the delivery of their local health services.

               …            …            …

The parties agree that devolving the control of hospital management to LHNs, and the establishment of Medicare Locals, will lead to services which are more responsive to the needs of local communities.

The states will be system managers, responsible for system-wide public hospital planning and policy. States will also be responsible for drawing up the Local Hospital Network boundaries and establishing the service agreements entered into by those local networks. Commonwealth funding will flow automatically from the national funding body to the local networks in accordance with these service agreements.

I would like to now turn to what has been happening in South Australia, specifically to the regions the member’s motion has drawn our attention to. What should be kept at the forefront of our minds when considering this member’s motion is the fact that these are private enterprises. The Australian Private Hospitals Association states that private hospitals are funded by their owners and operators. The services provided to patients treated in private hospitals are partially or fully subsidised from a variety of sources, including private health insurance funds, the Department of Veterans’ Affairs, Medicare, PBS and third-party insurers.

So the private hospitals mentioned expressed concern some weeks ago over the public subsidy paid for by the state of South Australia, which will be changed next financial year. They assume that without the particular South Australian government public subsidy in question they would not be viable and would either make a loss or close. These hospitals will continue to receive income from myriad sources, including—as the Australian Private Hospitals Association identifies—this federal government. So the Commonwealth supports private hospitals through its substantial subsidy of private health insurance in addition to Medicare, the PBS, the Department of Veterans’ Affairs and capital works projects. It also supports such service providers in the care they deliver to ageing members of the community. For example, in 2009-10 the Keith hospital received over $770,000 in aged-care funding, and in 2009 it also received $500,000 to build the new Hill wing.

The aged-care funding component includes an ongoing viability supplement in recognition of the difficulties smaller scale regional aged-care providers face. The hospital in Keith, for one, would also continue to receive some $300,000 per year from the South Australian government in recognition of the emergency services it provides in the region.

So let us understand that the South Australian government had every expectation that they would continue to receive public funds from both state and federal governments and provide public services for those funds. I understand that the South Australian department of health has been helping these hospitals, their management and their respective boards take a fresh look at their finances and plans going forward. While they might not be receiving quite as much money next year, they have been getting some very valuable management consultancy from the department in the form of Country Health SA. I understand the consultancy work has been very valuable indeed—as, in the case of the hospital in Keith, hospital management has been able to turn around their financial projections by something like $580,000 per year, which is of course well in excess of the $370,000 state subsidy in question that will terminate as of next financial year.

Going back to my earlier statements about the national hospitals network: one of the key drivers of the Commonwealth intervention in this area in the last 12 months has been the need for increased efficiency within the system. We have had ridiculous increases in the ordinary costs for the delivery of health care over the past few years. This will continue into the future. It will be made even more dramatic by an ageing population. This will be exacerbated by a proportionately smaller population fuelling our national economy and funding our health system. We need to lift our game and we need to start now—to drive our health dollars further and make it a viable concern going forward.

I am pleased as Punch that the Keith hospital is able to see an improved future, given there is less funding going into the hospital from the South Australian government. I sincerely hope that other regional services can perform similarly in the years ahead, adopting their management plans and funding sources to remain viable and continuing to provide the high-level services well into the future.

In conclusion, while I appreciate the member’s policy direction and his support for the work that we are doing on this side of the House in health and hospital funding—and I can understand his motion and I would not expect anything less of a local member; I know the member for Barker is very committed to his area, as are the other members—I cannot support this motion for one-off deals between the Commonwealth and individual hospitals. On this side of the House, we know that we will change the whole health system and make it a better system—and a better coordinated system, as we saw in the last few weeks in the discussions that took place. Our hospital reform will provide a better health system for all Australians.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to support my colleague the member for Barker and add my voice to the call for the federal government to provide direct funding to the Ardrossan and Moonta hospitals in my electorate and the Keith hospital in the electorate of Barker. I must draw some attention to the comments from the member for Hindmarsh. I think this may in fact have been one of the most difficult speeches he has ever given in this place. I believe that in his heart he knows he is on the wrong side of this argument in his obligation to defend his state colleagues. Despite the public and community outrage, repeated attempts by the Liberal Party in South Australia and the approaches to the federal government by the members for Barker, Boothby and me, the South Australian government and now the new Treasurer insist on enforcing last year’s decision to withdraw funding for the three community owned, not-for-profit hospitals—a relatively small amount of around $1 million that supported the various public services which form a modest part of their individual budgets but which threatens to be the straw that breaks the camel’s back.

I have previously raised the plight of these hospitals during the debate on the National Health and Hospitals Network Bill late last year, and consequently wrote to the federal and state ministers. However, I was very disappointed that my inquiry to the Minister for Health and Ageing, Ms Roxon, was handballed to the parliamentary secretary, who suggested I write to the state minister—and who, ever so helpfully, included his address. I had in any case already contacted the state minister and my appeals have fallen on deaf ears. I pointed out to Minister Roxon that under the current or even the future funding commitments to the state health system, the abandonment of support has financial penalties for the Commonwealth and that she should involve herself in the process. I will explain further in a minute.

This motion is intended to provide a mechanism for the Commonwealth to take an interest in state government decisions, which will result in higher costs for the Commonwealth and lead to fewer health services for the affected people in these regional communities. To explain the issues at hand, I turn firstly to the Ardrossan Community Hospital. The hospital has been receiving $140,000 a year from the state government which recognises that the hospital’s accident and emergency department provides a significant service to those who would otherwise access the public system at full cost. In any event, this $140,000 has been meeting approximately 50 per cent of the cost of the accident and emergency department. Fifty per cent of the admissions to the Ardrossan Community Hospital come through the doors of accident and emergency. Consequently, the department is essential to the hospital’s survival. Quite simply, any ambulance service has to deliver patients to an accident and emergency section, and the loss of the service at Ardrossan is simply not an option.

Ardrossan is the biggest town in the Yorke Peninsula council area. It has a population of around 1,200 but services a total population of about 3,000. It is worth noting that there is considerable growth in the region and a prospecting company, Rex Minerals, expects to establish a significant copper mine in the area in the near future which is likely to employ hundreds. The hospital was established in 1914 and, as well as the accident and emergency department, has 22 acute-care beds and also runs an unattached 25-bed aged-care facility, which accesses hospital based services such as kitchen, maintenance and administration.

The shortcomings of the current arrangements in the funding for the aged-care sector have been well chronicled in the House by me and many others. Suffice it to say that a stand-alone facility of 25 beds would simply be unviable. It is inevitable that, if the hospital were to fail, so would the aged-care facility. Where this displaced activity might be moved and the implications for the consumers, the community and the federal government are an important point that I will return to a little later.

However, I take the opportunity to express the community’s anger and disgust at the state government which has been expressed at a very emotional town hall meeting, participation in a march on Parliament House in Adelaide and an ongoing campaign to raise the issue at every level. The community is bewildered at how a government which professes to care for communities could take what is such a small amount of money in the context of the state budget away from such a valuable and essential community service yet fail to understand the potential impact of the cut. The South Australian Minister for Health, John Hill, seems completely oblivious to the concerns.

In a similar situation, the community-owned-and-run, not-for-profit Moonta Hospital has had funding of $288,000 per annum cut from its operating budget by the state government. It is worth noting that Moonta, with a population of about 3,500, is one of three main towns in the District Council of the Copper Coast, which is the fastest growing council area in South Australia outside Adelaide. The $288,000 has been paying for public access to eight public beds—it is, in fact, a fee for the service of providing public beds. But there is an important point here: simple arithmetic tells us those beds are funded at less than $100 a night—one hundred bucks a night! We could solve the crisis in the Australian health system overnight if we could fund our occupied bed days at $100 a night Australia-wide. What a bargain! Why would the government walk away from such a good deal for the taxpayer? How can $100 per night per bed be so important to any hospital?

The Moonta Health and Aged Care Service—community owned and not-for-profit—operates 14 acute care beds, an accident and emergency section and a 64-bed aged-care facility. The $288,000 that the state government has been providing does little more than support a critical mass to allow the combined facility to operate efficiently. If the hospital is unable to keep occupancy rates up in the small acute care section of the facility, obviously its future viability is threatened. The $100 per day the government provides for access for public patients would struggle to meet the costs involved in supplying the service, but it does provide enough bums on beds to allow the hospital to operate efficiently. Unless the funding is reinstated, the long-term survival of the hospital services will depend on the facility attracting enough self-funded patients to fill the same beds.

It is likely that, if the hospital services were to fail in the medium term, the Moonta aged-care section, as the bigger part of the facility, would continue to operate. However, the loss of service to the local community and the resident doctors would be immediate and drastic. The Moonta community has been outraged in a similar way to the citizenry of Ardrossan. They packed a similar town meeting and attended the Adelaide demonstration.

Apart from the obvious and distressing impact on these communities, what is the federal government’s interest in the decisions, good or bad, of a state government? I took the opportunity last year to point out to the minister in correspondence that the failure of any of these units will lead to extra demand on the nearest fully publicly funded facility. Not only will the taxpayer pick up the full cost of the enforced transfer but they will also meet further costs because these facilities in turn will need capital investment.

It is a little difficult to know on any given day what the government’s commitment is to the state hospital system—whether it is 40 per cent, 100 per cent, 60 per cent less GST, 50 per cent or 50 per cent of new spending—but it is a given that the Commonwealth has a liability. If, for instance, the hospital facility at Moonta were to close, the patient load would inevitably end up in Wallaroo, which is about 20 kilometres to the north. The workload at Moonta is approximately 1,400 private-bed and 1,800 public-bed days per year, an average of nine per day. There are concerns that the public hospital at Wallaroo is already under pressure to meet demand. It operates a 21-bed public facility with an attached seven-bed private hospital—28 beds in all—and is often operating at full capacity. In fact, often patients are transferred to the Maitland hospital an hour to the south. Should the Moonta workload be transferred to Wallaroo, the dramatic increase in numbers would almost certainly result in the need for a multimillion-dollar expansion which, according to the Prime Minister’s last decree on health, the Commonwealth will take 50 per cent responsibility for. So it is highly likely that the efforts of the state government to save a few hundred thousand dollars could result in a multimillion-dollar bill for the Commonwealth.

Similarly, a loss of viability in the Ardrossan hospital would not only lead to the transfer of patient load to the hospital in Maitland, requiring substantial upgrades, but would also require the construction of new aged-care beds, also probably in Maitland. While this might look like a desirable outcome for that particular town, it certainly is not good use of public money. I have not spoken about the Keith hospital, which is not in my electorate and has been similarly affected, but I shall go no further than to fully endorse the comments of the member for Barker on the matter.

The impact of these short-sighted decisions by the state government on these communities can barely be overstated. The possible dislocation of the aged and frail, the loss of amenity and the enormous impact on the economy threaten to implode the community. It is often said in regional Australia that, if you lose your school and your hospital, you have lost the battle. But underlying that is a clear financial interest for the taxpayer in the federal government taking control of this very small portion of health funding and feeding it directly to the local facility, because that is true local control.

I have spoken in this place before about the damage I believe the South Australian government has inflicted upon local and community involvement. This bill offers an opportunity for the federal government to send the message that enough is enough. (Time expired)